Many colleges have started financial-literacy programs in recent years. In a guest post, Bryan Ashton describes a new requirement of students at Ohio State University. Mr. Ashton, assistant director for financial wellness, is scheduled to present on the topic this week at the National Association of Student Financial Aid Administrators’ conference, in Nashville.
Most people agree that students and young adults do not fully understand their own finances. While the notion of writing a check is becoming (understandably) even more foreign, concepts such as budgeting, compound interest, and saving seem beyond the grasp of many people. Study after study shows students are failing financial literacy with grades of D and F.
That pattern, combined with the important financial decisions that we ask students to make in pursuing an advanced education, has led to increasing interest in adding financial education to the curriculum in elementary and secondary schools and on college campuses. In recent years such literacy has been pitched as the silver-bullet solution to economic problems (think of some of the response to the housing crisis of the last decade). That thinking is beginning to infiltrate popular opinion in the discussion of student loans and increasing borrowing.
At Ohio State University, we do not see financial literacy as a silver bullet but rather as an institutional responsibility to inform our students.
We are in the process of phasing in a requirement that all students complete a financial-education program during their second year, through the Scarlet and Gray Financial Program in the Office of Student Life’s Student Wellness Center. The mandate combines online learning and a one-on-one meeting with a student coach. The coaches, who are trained to assist their peers with financial concerns, volunteer their time to help students understand their financial goals and current financial situation, and develop healthy financial attitudes and behaviors.
On a broader scale, the one-on-one interventions allow us to deliver not only education but also support and guidance during a time of need—for example, when a student is applying for an emergency grant or loan.
We believe in covering all aspects of financial literacy and focusing on more than just management of student-loan debt. Such a holistic approach includes providing financial coaching to students in moments of financial crisis, developing core financial education, and instilling the mindset of financial planning that will serve students well as they navigate the world of insurance, retirement planning, and debt management.
Our institution’s motto, “Disciplina in Civitatem” (“Education for Citizenship”), truly represents the philosophy behind our investment in financial education. The skills that we can teach students and the thinking that we can expose them to are essential for life at and beyond Ohio State.
My co-presenters are from the University of California at Berkeley and Indiana University, two campuses that provide a mix of structured online content, group workshops, and one-on-one coaching in their financial-literacy programs. Those institutions are developing a culture of affordability through changes in philosophy on their campuses.
At Ohio State we recognize that much more research is needed to provide an evidence base for financial-literacy programs. However, we feel very strongly that we need to prepare current students to become future consumers, understand long-term financial consequences of today’s decisions, and manage the debt that may come with obtaining a degree.
As the research base evolves, we hope one day to link those efforts more concretely to institutional priorities such as lowering borrowing and default rates. For now, instilling financial literacy as part of our outside-the-classroom experience has allowed us to begin to create a culture of financial responsibility across the campus.
